Lundbeck forges multi-billion dollar CNS alliance with Otsuka

Signs deal to market a portfolio of new central nervous system drugs

Lundbeck has joined forces with Otsuka to develop and market a portfolio of new central nervous system (CNS) drugs in a new multi-billion dollar deal.

Both companies have a strong heritage in CNS medicine, and have complementary sales and marketing operations, with Otsuka strong in North America and Asia and Lundbeck covering Europe, Canada and Latin America.

Meanwhile, Lundbeck's expertise in anxiety and depression complements Otsuka's heritage in drugs for psychosis, according to Otsuka's president Dr Taro Iwamoto.

The two companies will work together on up to five new CNS products, with the alliance focusing initially on two drugs in Otsuka's pipeline, namely a depot formulation of the Japanese firm's antipsychotic medicine aripiprazole and OPC-34712, a novel compound in phase III testing for schizophrenia and depression.

In addition to these near-term projects, Otsuka will also have an option on co-development and co-marketing rights to three of Lundbeck's pipeline projects, which have not yet been identified.

Otsuka stands to receive up to $1.8bn from Lundbeck over the course of collaboration, including a $200m upfront fee, and development, regulatory and sales milestone payments.

Denmark-based Lundbeck has been looking for additional pipeline projects to help it weather the loss of patent protection on its biggest-selling product - the antidepressant Cipralex (escitalopram), which is sold as Lexapro in the US by marketing partner Forest Laboratories. Cipralex has already started to lose patent protection in some markets, with US exclusivity set to expire next year.

Revenue from Cipralex were 1.46bn kroner ($267m) in the third quarter, up 2 per cent, while US alliance revenue from Lexapro sales fell 12 per cent to 498m kroner. Combined, the two revenue streams make up around half of Lundbeck's total sales.

Under the terms of the Otsuka deal, Lundbeck gains rights to the aripiprazole depot and OPC-34712 in North and Latin America, Europe and Australia, as well and certain other countries. Marketing applications for the depot are due to be filed in the US soon and in Europe during 2013.

The alliance means that Lundbeck "has significantly broadened its growing psychiatry portfolio with exciting and unique treatments in an area of high unmet needs", said Ulf Wiinberg, the firm's CEO.

"This collaboration further strengthens our US platform and allows us to be introduced with the US psychiatry community in 2013."